How to Resolve a Denied Car Insurance Claim

It sometimes happens that insurance adjusters and insurers have reason to deny your car insurance claim. However, the power is yours to pursue your claim if you feel that the claim was denied on spurious grounds, salient information/extenuating circumstances were omitted or if the insurer acted in bad faith by denying the claim.

Normally, the adjuster would file a written report giving reasons for the claim denial. You should receive a copy of this report once a claim is denied. Your first step is to review the reasons highlighted in the adjuster’s report—along with your car insurance policy. In some cases, the claim that you made was not covered under your contract. For example, some drivers believe that liability coverage covers injury to their person (even if they are at fault). However, that is not what liability coverage is designed to cover.

If, after reviewing the claim, you find that you have just cause to pursue it still, you should file an appeal with your auto insurer. Upon receiving the appeal, the auto insurer should invite you to give your perspective on the accident and resulting claim. This aspect of the resolution process is the negotiation phase.

If you find that you are not getting a satisfactory response from your insurer, then you have can still take it a step further. You can seek dispute resolution through arbitration. Arbitration involves a neutral third party presiding over the dispute with a binding ruling. If this fails, you have the option of litigation, alternative dispute resolution or filing a complaint against our auto insurance with your State Insurance Commission.
From the moment you file your appeal with the insurer, have all relevant information handy and ensure that you keep copies of correspondence with your insurer. Having adequate documentation is a vital part of presenting your case professionally and in an organized manner. When you can substantiate your counter-claim, it makes it easier to expedite the dispute resolution process as well.

It is important for you to be persistent as well. Some insurers rely on claimants bailing out because they get fed-up with the run-around or do not have a clear idea of their rights and privileges during this process. The last straw in the claim dispute resolution process is litigation, alternative dispute resolution or filing a complaint with the SIC against your insurer. You should only file a complaint with your State Insurance Commission if there is evidence that the insurer acted in bad faith, was partial or fraudulent in denying your claim.

Knowing your right and privilege is important when your car insurer initially denies your claim. It is important to establish that you have a case and even more important that you are able to substantiate your appeal. Keep in mind that being organized and professional in presenting your case increases the likelihood of a successful appeal.